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bwin.party Gets NJ Waiver; PokerStars May Be Rejected

bwin.party Gets NJ Waiver; PokerStars May Be  Rejected

The New Jersey Division of Gaming Enforcement was on record as stating that after preliminary investigations, online gaming operating partners of the Atlantic City casinos would be granted transactional waivers in order to operate casinos upon the launch of legal online gaming in the state on November 26. A full investigation would later be completed before the companies were granted full online gaming licenses in the state.

In October, Borgata’s online partner, bwin.party Digital Entertainment, was granted such a waiver. But the waiver was only granted after two of the founders of bwin.party struck a deal with the DGE to sell their stakes rather than apply for individual licenses. Two original founders of Party Gaming, Ruth Parasol and her husband Russ DeLeon, have struck a deal with the DGE to sell their shares in bwin.party as the company seeks an online gaming license in the state.

The two are divesting for “personal privacy” reasons, according to a bwin.party press release.

“As part of the application process, certain substantial shareholders of bwin.party are required to submit individual license applications to the DGE,” bwin.party said in a press release.

The biggest online gaming question in New Jersey since it was legalized was how state regulatory authorities would treat PokerStars, the rogue online gaming operator that continued to operate in the U.S. after the passage of the Unlawful Internet Gaming Enforcement Act in 2006. PokerStars paid over $700 million to settle the charges with the Justice Department, and is barred by legislation, along with other companies that failed to withdraw from the U.S. gaming market, from participation in Nevada and Delaware. New Jersey, however, had no such “bad actor” clause in its legislation, preferring instead to allow regulators to make the determination.

While bwin.party did withdraw from the U.S., PokerStars made billions by refusing to do so. The settlement with the U.S. Justice Department forced company Chairman Isai Scheinberg to step down, and he remains a fugitive to this day. His son Mark Scheinberg took over as chairman.

Last month, sources told GGB that the DGE had given PokerStars an ultimatum that Mark Scheinberg and two other company officials must step down in order to obtain the same transactional waiver that bwin.party was given. The company has yet to respond.

Even in New Jersey, PokerStars has a colorful history. Last year, the company agreed to buy the Atlantic Club casino for $50 million, which would have immediately qualified it to hold an online gaming license, pending investigation. But when PokerStars failed to meet deadlines outlined in the agreement, the Atlantic Club canceled the deal, keeping the $11 million down payment.

Earlier this year, PokerStars reached an agreement with Resorts Casino Hotel to become its online gaming partner. As part of the deal, the company agreed to build a $10 million poker room at Resorts, pending licensing, a deal endangered by this possible rejection.

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